Every year millions of people, businesses, and organizations around the world use electronic financial management systems, such as electronic accounting systems, to help manage their finances. Electronic accounting systems use accounts for categorization of business transactions. Such electronic accounting systems gather data related to financial transactions of the users. The users can then sort the financial transactions into the various accounts in order to track their expenditures and revenues by category. The users can monitor many or all of their financial transactions and other financial matters from a single electronic accounting system and sort them into the various financial accounts. Such an electronic accounting system can help users save time by eliminating the need to check with several different financial institutions in order to manage their finances. However, traditional financial management systems are unable to optimize the financial management services provided to their users because the traditional financial management systems do not discern the nature and purpose of each account that the users create.
For instance, some traditional financial management systems enable users to generate and name the various accounts into which the users will sort their financial transactions. A certain user may have an account for employee travel expenses, an account for office supply expenses, an account for office furniture expenses, etc. The user may know the exact purpose of each account, but the traditional financial management system will not know the exact purpose of the accounts. While the user may be able to sort the various financial transactions into the account, the financial management system cannot adequately assist in the sorting process because the financial management system does not understand the purpose of each account.
One reason for these deficiencies is that in most cases the accounts, and the names of the accounts, are selected by the users and used differently by different users. Two users may each have an account named “Furniture”. The first user may use this account for revenue related to sales of furniture. The second user may use this account for expenses related to replacing furniture. Additionally, users may use nearly infinite variations of names for accounts that all serve the same general purpose. Consequently, the financial management system cannot know the true nature of an account based only the name.
The inability of traditional financial systems to adequately understand the nature of user-created accounts results in under-utilization of the potential of electronic financial management systems. For example, traditional financial management systems cannot adequately automate the process of sorting electronic financial transactions of the users. This results in wasted time and resources for both the users and the financial management systems. Furthermore, users may decide not to use the financial management system due to the inconvenience of the manual sorting process, or, worse yet, users may abandon the traditional financial management system because the traditional financial management system often erroneously sorts financial transactions into user accounts. The unrealized potential extends beyond merely assisting with the sorting process. A financial management system that understands the nature of the users' financial accounting and business practices can offer better data management services to the users and to third-parties.
What is needed is a method and system that solves the long standing technical problem of electronic financial management systems that are not able to effectively and accurately determine the nature of their users' accounts.